Tài chính doanh nghiệp - Chapter 14: Doing business in advanced economies

Chapter 14Doing business in advanced economies1Lecture planDefinition of advanced economies (AEs)Import markets in ICs – Western Europe; North America; Japan; Australia and New Zealand; newly industrialised economies  (NIEA-4)Trade issues in AEsExport marketing aspectsInvesting in AEs2Features of advanced economiesHigh per capita income and standard of livingMarket based economic systems; limited government interventionMature secondary sector; dynamic tertiary sectorRational macroeconomic policiesSophisticated financial systemsWell-developed infrastructuresAdvanced communication networksHigh-level education and training3Advanced economies as mixed economiesPredominance of private sectordomestic firms (small, medium, large)MNEsVarious degrees of government interventionSubstantial freedom for markets and MNEs4Government involvement in production of goods and servicesGovernment sector: about 1/3 of GDP of ICs + 10% of GDP for government companiesGovernment ownership: electric and telephone utilities; banking, petroleum Australiaabout 1/4 of GDP ( >US and UK; inward FDI than Japanforeign affiliates: 1.5% of total sales in JapanSectoral shifts since mid 1970sservices up; primary/secondary sectors downbanking: the leading service sector15FDI inflows into Oceania, 1993–2003, $US billionSource: adapted from UNCTAD, World Investment Report, 200416Investment considerationsPolitical stabilityNationalisation; government controlsprices, pollutionEconomic outlook(e.g. synchronised cycles)Attitude to foreign investment17Investment considerations cont.TaxesIncentivesPersonnel, labour and social considerationsExchange ratesEase of doing business18